At Extreme Investor Network, we understand the importance of staying ahead in the ever-changing world of investing. Fixed-income investors may consider adjusting their portfolio as we move into the second half of the year. While the Federal Reserve has kept interest rates steady for now, many experts predict rate cuts in the near future.
Our Chief Fixed-Income Strategist, Kathy Jones, believes that there is room for the Fed to cut rates due to falling inflation and a cooling labor market. She anticipates better returns for fixed income in the second half but warns of high volatility. Finding the right mix of fixed-income asset classes will be key to performance.
Jones suggests considering adding duration to your portfolio by looking beyond Treasurys. She sees opportunities for attractive yields and potential price appreciation in investment-grade corporate bonds and government agency mortgage-backed securities in the six- to seven-year time frame. By creating a barbell portfolio with Treasurys on one end and investment-grade bonds on the other, investors can benefit from a diversified approach.
JPMorgan also recommends a barbell approach, expecting the yield curve to remain inverted but possibly sloping positively by the end of 2025. Wells Fargo advises investors to prioritize credit quality and recommends municipal bonds and securitized products, like residential mortgage-backed securities. Municipal bonds, especially for those in higher tax brackets, provide tax-free income and are a good long-term investment option.
At Extreme Investor Network, we believe that staying informed and adapting your investment strategy is crucial for success in today’s market. By following expert advice and making informed decisions, investors can navigate the uncertainties and capitalize on opportunities in the fixed-income landscape. Make sure to stay updated with our latest insights and recommendations to maximize your investment potential.